DTN Before The Bell-Livestock

GENERAL COMMENTS

Narrow trading ranges are developing Friday morning as traders are taking a lackluster approach at the end of the week. The inability for traders to focus on the complex has allowed markets to remained mixed in the cattle complex and focus on sluggish market movement. Corn markets are trading higher in light trade activity. The stock market is trading higher in light early trade. Dow Jones is 77 points higher while Nasdaq is up 34 points.

LIVE CATTLE:

Opening call: Mixed. Very light trade is expected to continue through most of the trading session with little interest expected to be seen across the live cattle market. The early pressure in cash cattle trade and inability to support beef values may limit any significant moves in either direction through the live cattle complex. Live cattle futures are holding price moves from 20 cents lower to 15 cents higher during initial trade. Cash cattle activity remains quiet Friday morning following moderate trade Thursday. Trade seen in the South developed mostly at $134 which was $3.50 to $4 per cwt lower than last week. Northern Trade was mostly at $213 which was $8 lower than last week. Most of the trade is expected to be done for the week, although some clean up activity may develop, especially in the North. Open interest Thursday increased 2,564 positions (421,300). Spot June liquidated 3,392 positions (61,023) and August contracts added 5,371 positions (182,360). DTN projected slaughter for Friday is 110,000 head.

FEEDER CATTLE:

Opening call: Mixed. Light directionless trade is seen through feeder cattle trade early Friday morning with prices hovering between 10 cent losses and 20 cent gains in nearby contracts. The lack of volume within the first few minutes of trade seems to be the tone of the morning as traders may allow not only price levels to limp through the end of the week, but markets to hold in the current range as traders reassess current positions over the weekend. Cash lean index for 5/16 is $142.12, down $0.08. Open interest Thursday slipped 286 position (56,911).

LEAN HOGS:

Opening call: 20 to 60 cents lower. Light pressure is slowly developing Friday morning as the lack of direction through the end of the week seems to be allowing the entire lean hog complex to limp into the end of the week with very little market direction. It appears that traders feel comfortable holding summer contracts in a range from $78 to $79 per cwt as they continue to focus on very tight cash hog prices through the end of May and focus on outside market moves in order to wait for some stability to develop within the next few weeks. Cash bids are steady to $1 lower with most bids steady to 50 cents lower. Open interest Thursday added 588 positions (222,395). Spot month June lost 702 positions (34,130) and July fell 508 positions (60,488). Cash lean index for 5/16 is $74.14, up $1.13. DTN projected slaughter for Friday is 421,000 head. Saturday runs are expected to be 82,000 head.

Rick Kment can be reached at rick.kment@dtn.com

(SK)

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